Core Viewpoint - Goldman Sachs has upgraded Bunzl plc from Sell to Neutral, indicating a more balanced risk/reward profile following a significant share price decline this year [1] Group 1: Stock Performance and Market Reaction - Bunzl's stock has decreased approximately 30% in 2025, primarily due to an April profit warning that reduced growth and margin expectations for the upcoming year [2] - The profit warning was largely attributed to weakness in Bunzl's North American operations, which account for around 60% of the company's total revenue [2] Group 2: Financial Performance and Projections - Despite the lowered guidance, Bunzl's first-half results were generally in line with expectations, and the resumption of its share buyback program has mitigated some near-term risks related to earnings and leverage [3] - Goldman Sachs anticipates EBITA margins of 7.6% for Bunzl in 2025, a decrease from 8% in 2024, but expects gradual improvement in subsequent years [3] Group 3: Valuation and Investment Thesis - Currently, Bunzl trades at approximately 13 times Goldman Sachs' estimated earnings for 2026, compared to a historical mid-cycle average multiple of 17 [4] - The combination of a discounted valuation and Bunzl's resilient business model suggests that the shares are less risky than they were earlier in the year [4]
Goldman Sachs Upgrades Bunzl To 'Neutral' After Sharp Share Decline
International Business Times·2025-10-03 12:13